10-KPeriod: FY2012

CSX CORP Annual Report, Year Ended Dec 28, 2012

Filed February 19, 2013For Securities:CSX

Summary

CSX Corporation's 2012 10-K filing highlights a year of stable revenue, with $11.756 billion generated, largely driven by a modest increase in merchandise and intermodal volumes offsetting a decline in coal. The company reported operating income of $3.457 billion and a slightly improved operating ratio of 70.6%, demonstrating effective cost management and efficiency gains. Strategic growth initiatives focused on intermodal capacity expansion and export coal demand are noted as key areas for future development. The company's financial position remains robust, with significant capital expenditures of $2.341 billion allocated to infrastructure improvements, regulatory compliance (including Positive Train Control - PTC), and equipment. CSX continued to return value to shareholders through dividends, increasing its quarterly payout, and completing a $2 billion share repurchase program. The company is actively managing its debt and maintains a strong liquidity position with a significant credit facility. Key risks highlighted include regulatory changes, competition, and shifts in the energy market impacting coal volumes.

Financial Highlights

49 data points
Beta

Revenue

$11.76B

Net Income

$1.86B

15.8% Net Margin

EPS (Diluted)

$0.60

Total Assets

$30.72B

Cash & Equivalents

$784.00M

Free Cash Flow

$605.00M

Financial Statements
Beta
Revenue$11.76B
Operating Expenses$8.30B
Operating Income$3.46B
Interest Expense$566.00M
Net Income$1.86B
EPS (Basic)$0.60
EPS (Diluted)$0.60
Shares Outstanding (Basic)3.11B
Shares Outstanding (Diluted)3.12B

Key Highlights

  • 1Revenue remained stable at $11.756 billion in 2012, with a 1% decrease in volume offset by pricing gains and higher fuel recovery.
  • 2Operating income increased by 1% to $3.5 billion, and the operating ratio improved to 70.6% due to efficiency gains and cost savings.
  • 3Merchandise revenue represented 57% of total revenue, driven by diverse commodity shipments including agricultural products, chemicals, and automotive.
  • 4Coal shipments saw a significant decline of 16% due to the displacement of coal-fired power plants by natural gas, though export coal showed strength.
  • 5Intermodal volume increased by 7%, driven by highway-to-rail conversions and expanded service offerings, indicating growth in this segment.
  • 6CSX invested $2.341 billion in capital expenditures, focusing on infrastructure, regulatory compliance (PTC), and asset modernization.
  • 7The company returned value to shareholders through $558 million in dividends and $734 million in share repurchases, completing its $2 billion repurchase program.

Frequently Asked Questions

CSX's main business segments were Merchandise, Coal, and Intermodal. Merchandise was the largest, contributing 57% of revenue with nearly 2.7 million carloads. Coal accounted for 27% of revenue with 1.3 million carloads, and Intermodal contributed 14% of revenue with 2.45 million units.

CSX noted that shipments of utility coal declined significantly due to low natural gas prices displacing coal-fired power plants. However, export coal shipments saw an increase, driven by higher demand for U.S. thermal coal in international markets. The company expects long-term growth in export coal to partially offset domestic declines, though this market is subject to volatility.

CSX is investing significantly in PTC implementation, with an estimated total multi-year cost of at least $1.7 billion. Through 2012, $585 million had been spent. Federal legislation was pending to delay the 2015 deadline, but the company acknowledged the substantial costs and ongoing operating expenses associated with this regulatory mandate.

In 2012, CSX returned capital to shareholders through dividends paid, totaling $558 million, and share repurchases totaling $734 million. The company completed its previously announced $2 billion share repurchase program and has a history of increasing its quarterly dividend.